[READER QUESTION] What Types of Travel Insurance are Covered on Award Travel?

A Pointshogger’s reader asked a question about the types of travel insurance that is covered on award travel.

Generally speaking, if you have purchased your ticket with a travel credit card, you are automatically entitled to a few types of coverage (most of the time): emergency medical insurance, trip interruption, trip cancellation, baggage theft and delay, all up to the amount outlined in each section.

However, this works a little differently with award tickets. Travel insurance policies will only cover non-refundable cash expenses. For trip insurance, you will only have coverage for the value paid for the tickets itself; which means, award tickets would give you a coverage of $0, unless you had to pay a surcharge and taxes for it. In this case, the coverage will be equal to the amount of fees and taxes paid for that particular trip.

This seems like a downfall for award tickets in comparison to revenue tickets, but there is definitely more to consider.

Airline loyalty programs will also offer insurance through their affiliated partner companies at a discounted price. American Airlines offers a basic travel insurance package for about $20 which covers trip interruption, trip cancellation, baggage theft and delay. It isn’t much, but it helps take a bit of weight off your shoulders when an emergency occurs.

Another option is to purchase a specific insurance package offered by the airline company. Let’s take Aeroplan for an example, which offers travel insurance packages for award travel. For Aeroplan, you can choose between the All-Inclusive, Non-Medical Inclusive and Global Medical.

The All-Inclusive insurance from Manulife offers pretty much anything you’d receive when purchasing premium travel insurance outside award redemption travel. Some policies which I feel will be most applicable to your travel needs are Emergency Medical Care, Trip Cancellation, Baggage Theft and Delay.

Another important one would be coverage on award redeposit fees. You never know if there will always be award seats available for a particular flight, so this becomes very useful as you want to ensure you can place those hard-earned miles back into your account if an emergency arises.

Most redeposit fees will cost you about $150 to $200; coverage is applicable when you need to change the flight time or redeposit your ticket for usage at a later date. Aeroplan, charges $90 for this service and restricted that an award ticket is reinstated 22 days prior to departure; otherwise, you will need to redirect those miles for another flight dated within a year of the original issued ticket.

Moreover, you may also want to consider insurance for a one-way return flight. Some airlines do not offer one-way award tickets, so you will need to purchase the round-trip when you book a reservation. Consequently, if an emergency occurs and you need to take an early flight home, you will not be insured as you have already exhausted the miles for your outbound flight.

Ultimately, you are better off self-insuring as trip insurance for award travel is close to a bare minimum (unless you are willing to pay a premium to upgrade). Afterall, you did get the ticket for “free”, so coverage automatically has been voided at this point. Depending on your travel needs, it is important to purchase insurance which will secure and protect you during your travels. By strictly looking at the insurance, award travel may seem discouraging, but there’s much more it. In the end, award travel with an add-on premium insurance is definitely more rewarding and financially sustainable for your wallet than purchasing revenue tickets.